FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
JUNE 21, 2007
FOR IMMEDIATE RELEASE
FORMER BALTIMORE CITY POLICE OFFICER AND HIS WIFE PLEAD GUILTY IN INSURANCE FRAUD SCHEME
Used Official Position to Falsify Reports and NCIC Entries
Baltimore, Maryland - Michael Bernard Nelson, age 26, and his wife, Tierra Spencer Nelson, age 24, both of Baltimore, pleaded guilty today to conspiracy to commit mail and wire fraud in connection with a scheme to create and sell false police reports of thefts and accidents to collect fees and insurance payments, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
U.S. Attorney Rod J. Rosenstein said, "Law enforcement officers are entrusted to use their official authority honorably for the public’s protection. I commend the Baltimore Police Department for assisting the FBI in exposing a fraudulent scheme that involved the creation of false police reports for personal benefit."
Special Agent in Charge (SAC) William D. Chase, of the Baltimore Division of the Federal Bureau of Investigation (FBI) stated, "Public corruption remains a very high priority for the FBI. We are committed to holding those in positions of trust and authority to the highest standard, and to make them accountable for their actions. We have worked closely with the Baltimore City Police Department and their Internal Investigation Division on this case and together we will continue to pursue anyone who violates the trust of the citizens of Maryland."
According to the plea agreements, Michael Nelson was a Baltimore police officer with access to police forms to make official reports of crimes, and to the National Crime Information Center (NCIC) database, a computerized index of criminal justice information available to law enforcement and criminal justice agencies across the United States. From October to December 2006, Michael and Tierra Spencer Nelson (Spencer), who were married on December 15, 2006, conspired to misuse Nelson’s police powers to create false police reports and enter false information into the NCIC database to facilitate fraudulent insurance claims, and solicited and obtained money payments to create such false reports and entries.
Specifically, on October 25, 2006, Spencer called the Baltimore City Police Department and falsely reported that Michael Nelson’s personal vehicle had been stolen. Spencer had actually asked a friend to store the car so that it would not be discovered by the police. The bogus theft was entered into the NCIC database. Nelson reported the bogus theft to State Farm Insurance Company, which mailed checks and wired funds totaling $10,765.06 to pay off the claim.
Sometime before November 16, 2006, Spencer told a confidential informant (CI) that Nelson was selling fraudulent police reports that could be used to get money from insurance companies. Nelson prepared false police reports for the CI to support two false home burglary claims for items purportedly stolen and valued at $9,775, and a false automobile accident claim alleging personal injury. The CI paid the Nelson and Spencer $850 for the three reports.
On December 27, 2006, Nelson and Spencer met with the CI to store a car for the CI’s purported cousin so that the “cousin” could falsely report the car stolen to his insurance company. The CI paid Nelson and Spencer $725 to store the car and for a false police report. The car was actually owned by the Baltimore City Police Department and was valued at $11,575. A few days later, the car was recovered from an alley where Spencer and Nelson had left it.
The total intended loss from the defendants’ fraudulent activities is over $30,000. As part of the plea agreements, the defendants have agreed to pay restitution to State Farm of $10,765.06.
The Nelsons face a maximum sentence of 20 years in prison followed by three years of supervised release for conspiracy to commit mail and wire fraud. U.S. District Judge Richard D. Bennett has scheduled sentencing for September 7, 2007 at 12:00 p.m.
United States Attorney Rod J. Rosenstein praised the Federal Bureau of Investigation for the investigative work performed in this case with the cooperation and assistance of the Baltimore Police Department. Mr. Rosenstein thanked Assistant U.S. Attorneys Tonya Kelly Kowitz and Sandra Wilkinson, who are prosecuting the case.